Evaluation of Accounting Standards: Regulations No. 500/2002 Coll.

This report provides an in-depth analysis of accounting standards and their impact on business financial reporting, with a specific focus on the amendment to regulations no500/2002coll. The introduction establishes the significance of accounting standards in ensuring consistent and accurate financial information. The body of the report delves into the importance of transparency in financial reporting, the adoption of IFRS, and the impact of the amendment on balance sheet items and research costs. The report highlights the benefits of double-entry bookkeeping in enhancing accuracy and reducing fraud, while also acknowledging the challenges associated with implementation. The conclusion emphasizes the critical role of accounting transparency in improving business performance and summarizes the positive impacts of the discussed regulations. The report draws on various sources, including Deloitte Czech Republic and PwC, to support its findings.

Question 1

Table of Contents
Introduction...........................................................................................................................................2
Body......................................................................................................................................................2
Conclusion.............................................................................................................................................5
References.............................................................................................................................................6

Introduction
Accounting is the mathematical science of gathering, storing and compiling financial
information into suitable format that aids the organization to communicate to its end clients in
effective and efficient manner. Accounting standards and measurement is based on the
accounting theories are helpful for business because their implementation and creation make
sure that organization provide consistent and accurate information. As studies conducted by
Scott, (2015),said that accounting standards are the set of rules and regulations that provides
guidance the entity as well as organization to present the financial information according to
the accepted accounting measurements. The present essay is mainly based on evaluation of
the amendment to regulations no500/2002coll., for business from January 1, 2018. In order
to evaluate and analyze the accounting standards and measurement, regulations
no500/2002coll is selected and it was published on February, 2018 by Deloitte Czech
Republic (edu.deloitte.cz, 2018). The article mainly emphasised on the how these
amendment helps the business to present its financial reporting with transparency.
Body
According to the Hoyle, Schaefer& Doupnik, (2015), with expanding globalization in the
business world, as well as the world in general, a noteworthy worry of the business world is
the manner by which an organization can expand its worldwide impact. For some,
organizations, globalization has not just expanded the open doors for business exchanges, yet
additionally the open doors for capital from outside investors. With the implementation of the
innovation technology in competitive market, financial specialists can get data as to
substantially more rapidly than they could previously. Subsequently, cross-border listings
have expanded and financial specialists can make universal investments. So, it is important
that investors can have an arrangement of financial standards and transparency that are
reasonable and practically identical with the goal that they can make the most well informed
choices.

Starting at July 2014, there are 141 states that have received IFRS (International Financial
Revealing Standards) either totally or to a limited extent. Apart from that Malaysia, Japan,
Russia, the United States, Colombia and India, are largely thinking about the potential usage
of IFRS (PWC, 2014b). The US, as the biggest economy and the biggest public equity model,
has huge impact to the accomplishment of universal accounting measures. If that the U.S.
received IFRS, more nations, for example, Japan (Hail, Leuz, and Wysocki, 2010), would be
all the more ready to receive IFRS also. Such as the decision of the EU to encourage more
nations to adapt International Financial Revealing Standards, so that adoption by the United
States will to a great extent advantage the IASB ("International Accounting Standards Board
"). Therefore, it can be said that adoption of the accounting standards by other countries
mainly dependent on the trasperancey of the accounting standard.
As per the analysis of the article, it is found the main reason for the change to regulations
no500/2002coll is trasperancey. As per article, it is observed that transparency has a great
impact on the management decision as well as business transaction. It can be found that the
main issues associated with the lack of financial trasperancey are that the user can’t
understand the financial specification due to lack of specificity regarding the nature and the
amount of financial report. Therefore that utilization of the EU IFRS9 financial instruments
that replaces IAS39 financial instrument recognition and instruments would helps the
business to represent it financial statement to user with transparency.
IASB, 2006, section QC39 clarifies that financial report of the organizations are mainly
around clients who have a sensible information of business as well as economic activities and
budgetary reporting, and who study the data with sensible diligence and that particular data
ought not be rejected due to fact that it might be excessively confusing or hard for a few
clients to understand it. That stated, the measure of reasonable knowledge may strike some as
too subjective to possibly be valuable, and standard setters keep on struggling with how to
make multifaceted hidden financial aspects justifiable to clients of financial reports
(Shortridge, & Smith, 2009). The report shows that the main changes in the balance sheet
items B in fixed assets as well as cancellation of the possibilities to research costs which
would helps the business to represent its financial information more accurate and effective
manner. Before the amendment it can be found that organization that reported intangible
results of R&D (research and development) is presented under item B.1.4 as well as the other
intangible fixed assets in anticipation of their disposal (edu.deloitte.cz, 2018). Therefore that

the findings signifies that only the costs associated with the development can now reported in
intangible fixed assets.
From the findings it can be found that in single entry financial is that lack of the
representation of the data might impact the performance of the organization in negative
manner and also impact the controlling of the business strategies objective. Moreover it can
be found that the single entry accounting reports can increases the lack of methodical as well
as exact accounting information can increase to improper control over the organization
problems as well as lack of management. Therefore implementation of the double entry
bookkeeping accounting system helps the organization to provide accuracy, error reduction
and representation of the financial statement preparation.
In the methods of double entry system both the parts of each exchange are recorded. Since it
is seen that in the methods of double accounting strategy both the parts of an exchange are
recorded, for each charge there must be a comparing credit of an equivalent sum. From the
finding it can be seen that in this methods balance sheet of the organization can be made by
together all accoutring associating to liabilities and assets and therefore the position of
finance of the organization can be assessed (Cañibano, 2017). Moreover it can be found that
the purchase of goods, sales, revenues, stock, profit or loss and expense of distinguish years
can be effectively compared with the failure or success of the organization. It can be
observed that primary purpose of an organization to represents financial record in
transparency and with the utilization of double entry booking system in the financial record
can aids the organization to reduce fraud by leaving an audit trail. Now, it can be said that
implementation of this act or amendments involves some issues that it required more time,
needed more money and labour and the financial management of an organization needs to
record the information in book in two stages as well as two sides that increases the number
of size (Sangster, (2015). Apart from that the system of double bookkeeping methods is more
complex as compared to the pervious accounting system; this it can be said that it is the
higher possibilities that accounting manager committing mistake and errors.
As per the article, it can be seen that the main purpose of the amendment on the accounting
system is that the business can maintain its financial statement by double entry accounting
system (edu.deloitte.cz, 2018). Therefore the findings and evaluation it can be said that
implementation of this regulations not only helps the business to represent its financial

statement in better manner but also provides dealing with closing and opening balances in
successful manner. Apart from that, utilization of the purchase ledger and sales ledger means
that the business can successfully track who the organization own money as well as who
owns the business in easy manner. Apart from that the organization can effectively identify
that its financial positions is much more clearly and aids in reduce the accounting error.
Therefore from the evolution and analysis of the above discussion it can be said that
implementation of this acts in financial institutions or banks have a positive impact on the
organization performance and helps them to reduce error in successful manner.
Conclusion
From the findings, it can be concluded that in order to improve the performance, accounting
transparency is more vital for business. In order to keep accounting trasperancey in more
successful manner Amendment to Regulation No. 500/2002 Coll., has been introduced for
business. The findings signify that implementation this accounting system not only helps the
organization to represent its financial information clearly but also helps them to reduce
financial error in successful manner. Time consuming and more effort with more money is
considered the main issues of this amendment but the evaluation reveals that utilization of
this act in financial record helps the organization to increase performance in effective
manner.

References
edu.deloitte.cz. (2018). Amendment to Regulation No. 500/2002 Coll., for Businesses, from 1
January 2018. [online] Available at:
https://edu.deloitte.cz/m/Content/Download/accounting-news-1802 [Accessed 8 May
2018].
Hail, L., Leuz, C., & Wysocki, P. (2010). Global Accounting Convergence and the Potential
Adoption of IFRS by the United States: An Analysis of Economic and Policy Factors.
Accounting Horizons, 24(3), 355-394. http://dx.doi.org/10.2139/ssrn.1357331
Hoyle, J. B., Schaefer, T., & Doupnik, T. (2015). Advanced accounting. McGraw Hill.
PwC (2014b). IFRS Adoption by Country. PricewaterhouseCoopers LLP. Retrieved from
http://www.pwc.com/en_US/us/issues/ifrsreporting/publications/assets/pwc-ifrs-by-
country-2014.pdf
Sangster, A. (2015). The genesis of double entry bookkeeping. The Accounting
Review, 91(1), 299-315.
Cañibano, L. (2017). Accounting and intangibles.
Scott, W. R. (2015). Financial accounting theory (Vol. 2, No. 0, p. 0). Prentice Hall.
Shortridge, R. T., & Smith, P. A. (2009). Understanding the changes in accounting
thought. Research in accounting regulation, 21(1), 11-18.